EPA looked askance at DENR’s proposed coal ash settlement with Duke

The U.S. Environmental Protection Agency thought North Carolina regulators were too lenient when they came up with a settlement with Duke Energy over coal ash plants that imposed a relatively small fine.

The U.S. Environmental Protection Agency thought North Carolina regulators were too lenient when they came up with a settlement with Duke Energy over coal ash plants.

The EPA’s questioning of the proposed settlement in 2013 surfaced in thousands of emails and other records that the state Department of Environment and Natural Resources recently made public in response to records requests by the news media, advocates and others.

The records also reveal tensions among state regulators, their supervisors and the nation’s largest utility company over the past five years as North Carolina began paying more attention to coal ash storage ponds in the wake of the catastrophic spill of the material in Tennessee in 2008.

“We need to move forward with this permit,” one DENR supervisor emailed colleagues in 2012, referring to a regulatory dispute at one power plant. “Duke is getting impatient.”

A far smaller spill – although the third largest in U.S. history – occurred at Duke Energy’s plant in Rockingham County on Feb. 2, polluting the Dan River with coal ash sludge and wastewater.

DENR has been criticized for too quickly coming up with a settlement for two lawsuits it filed last year against two Duke plants alleging violations of their water discharge permits.

The EPA, in comments submitted to DENR on the proposed settlement last year, questioned the size of the penalties of $51,500 for the Asheville plant and $36,000 for the Riverbend plant in Gaston County, in addition to cost reimbursements bringing the total liability to $99,111.

That amount “seems low considering the number of years these facilities are alleged to have been out of compliance,” the EPA response states. However, since the federal agency didn’t have information that DENR had incorrectly applied its penalty policy, it would be difficult to challenge the fines, the response says. The EPA also thought more testing and monitoring for pollution should be required.

DENR says the thrust of the settlement wasn’t about money but about making sure Duke dealt with the problem at two specific plants. The agreement would have required Duke to test waters and stop illegal discharges. DENR modified the proposed settlement to meet two of the EPA’s four concerns about monitoring and testing at the two plants. The settlement would have also imposed fines if the company failed to follow through.

Proposed settlement defended

Earlier this month, amid criticism of the agency after the Dan River spill, DENR withdrew the proposed settlement altogether.

In February, DENR Secretary John Skvarla defended the settlement proposal at a news conference. He noted the wealth of the country’s biggest utility couldn’t legally be taken into consideration when coming up with a fine, and the agency has to consider specific factors when it levies fines.

“The fine was irrelevant in the grand scheme of things,” Skvarla said. “We were trying to get to the end game.”

Skvarla said his agency’s goal is to successfully enforce safeguards without dragging disputes out in court for years.

The emails released illustrate the give-and-take between regulators and private industry, where both sides sometimes take a confrontational approach while also working toward a compromise.

Conflicts were foreseen in a July 2009 email by stormwater engineer Ken Pickle, who explained to colleagues that DENR was taking a closer look at the coal ash plants owned by Duke Energy and what was then called Progress Energy. He added: “As to the potential for a Progress Energy (and Duke) backlash, our unit has been quite concerned on this point.”

Two months later, Mike Lawyer, an engineer in the water quality division, described a problem he was running into at the Weatherspoon plant in Robeson County.

“Fortunately, or unfortunately, Weatherspoon and PEC (Progress Energy Carolinas) staff seem to feel as though I am on their side,” Lawyer wrote. “… I am on the side of the environment and specifically the protection of our state’s surface waters via stormwater management. Somehow, it seems as though they have taken my willingness to meet with them and provide technical assistance as my unwillingness to ensure compliance with our rules and regulations.”

Alleged ‘gamesmanship’

The anticipated backlash came as DENR rolled out its new focus on coal ash ponds, particularly requiring more monitoring when plants’ stormwater permits were up for renewal. Leading the charge was George Everett, Duke’s main lobbyist in Raleigh.

Everett commands attention not only because of his employer but because of his resume: He was a deputy director at the state environmental agency, was executive director of the Manufacturers and Chemical Industry Council of North Carolina, and holds degrees in biology and zoology.

Everett wanted regulators to justify the new requirements and at times seemed incredulous at DENR’s plans, which he called burdensome and costly.

“Why would we do this when we are looking for a kinder, gentler regulatory framework according to the governor, etc.” Everett wrote, after posing a list of questions suggesting DENR was taking a tougher stance than the federal government.

In the same July 2011 email, Everett chided the regulators for wanting to check for the presence of silver in stormwater runoff, saying if that was worthwhile, then “maybe in retirement I can become a prospector and hang around old coal sites looking for nuggets.”

In a subsequent email, a DENR staffer replied: “He can take that up with the researchers who identified this metal as a contaminant in coal combustion waste.”

“There is no substance here; this is all gamesmanship,” Pickle emailed a colleague, referring to Duke Energy’s aggressive stance in resisting proposed regulations.

Front-line staffers began getting frustrated that proposed regulations weren’t going anywhere up the chain of command.

In December 2011, stormwater permitting unit supervisor Bradley Bennett wrote that he was disappointed that his unit had come up with alternatives for a specific plant’s regulations that didn’t seem to have been considered by higher-ranking officials.